Thursday, March 13, 2014

Are we paying too much for Renewable Energy fund?

From the few briefings conducted by the utility company (SESB), and other seminars in which SEDA Malaysia took part, I gathered that many feedbacks on the quantum of RE surcharge in the consumers electricity bills point towards disagreement.

Some say that we should maintain the 1% rate introduced in 2012. Some say we should not be charged anything at all.

At one of the briefings, the president of the Federation of Sabah Industry (FSI) argued that, while agreeing with the government effort in promoting green technology, we should not be asked to pay the levy, having already hit hard by the electricity tariff hikes effective Jan 1 this year. Instead, the government should allocate budget for the purpose. To this, I tend to agree; the government should not stop at the RM300 million it contributed when the fund was set up at the end of 2011.

Are we paying too much, relatively? Paying 1.6% more for your utility bill may be a bit burdening but let's look at what are the rate in other countries implementing FiT mechanism:

COUNTRY

SURCHARGE IMPOSED

Germany

-

19%

Italy

-

8%

Portugal

-

5.6% (industrial), 6.2% (residential)

Thailand

-

2% (2013), 8% - 10% once 7GW of RE project is operational in few years time

Compared to others, we are actually paying much less. SEDA is looking at 2% but this, according to Dr Wei-née Chen, was not approved by the cabinet. I have no qualm if it will eventually be approved, but the government should also look at other ways of funding the RE, including setting aside some fund from its coffer.

Malaysian Photovoltaic Industry Association, MPIA's suggestion to make “carbon tax” as a source of funding for renewable energy is also interesting and is worth looking into.

By taxing carbon polluters, which include coal power plants, the transport sector and industries, these sector would be compelled to curtail their carbon emissions. An incentive may be given to those who make effort in reducing carbon emission, in the form of lower surcharge. The quantum is to be calculated after a careful study.

Notwithstanding, we should support the effort to promote sustainable energy in Malaysia.